- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -XPRELIMINARY STATEMENTDefendant Michael Cohen is scheduled to be sentenced on December 12, 2018. The UnitedStates Attorneyas Office for the Southern District of New York (the aOfficea) respectfully submitsthis memorandum in connection with that sentencing and in response to the defendantas sentencingmemorandum dated November 30, 2018 (aDef. Mem.a).Cohen, an attorney and businessman, committed four distinct federal crimes over a periodof several years. He was motivated to do so by personal greed, and repeatedly used his power andinfluence for deceptive ends. Now he seeks extraordinary leniency a a sentence of no jail time abased principally on his rose-colored view of the seriousness of the crimes; his claims to asympathetic personal history; and his provision of certain information to law enforcement. Butthe crimes committed by Cohen were more serious than his submission allows and were markedby a pattern of deception that permeated his professional life (and was evidently hidden from thefriends and family members who wrote on his behalf).Cohen did provide information to law enforcement, including information that assisted theSpecial Counselas Office (aSCOa) in ongoing matters, as described in the SCOas memorandum tothe Court, and the Office agrees that this is a factor to be considered by the Court pursuant to Title

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18, United States Code, Section 3553(a). But Cohenas description of those efforts is overstated insome respects and incomplete in others. To be clear: Cohen does not have a cooperationagreement and is not receiving a Section 5K1.1 letter either from this Office or the SCO, andtherefore is not properly described as a acooperating witness,a as that term is commonly used inthis District.As set forth in the Probation Departmentas Presentence Investigation Report (aPSRa), theapplicable United States Sentencing Guidelines (aGuidelinesa) range is 51 to 63 monthsaimprisonment. This range reflects Cohenas extensive, deliberate, and serious criminal conduct,and this Office submits that a substantial prison term is required to vindicate the purposes andprinciples of sentencing as set forth in Section 3553(a). And while the Office agrees that Cohenshould receive credit for his assistance in the SCO investigation, that credit should not approximatethe credit a traditional cooperating witness would receive, given, among other reasons, Cohenasaffirmative decision not to become one. For these reasons, the Office respectfully requests thatthis Court impose a substantial term of imprisonment, one that reflects a modest downwardvariance from the applicable Guidelines range.1BACKGROUNDA.

Cohenas Offense ConductAs described in the PSR, in Criminal Information 18 Cr. 602, as well as in Criminal

Information 18 Cr. 850, Cohen committed four separate and serious crimes over the course ofseveral years. These crimes a willful tax evasion, making false statements to a financial institution,illegal campaign contributions, and making false statements to Congress a were distinct in theirharms, but bear a common set of characteristics: They each involve deception, and were each

1

The Probation Department has similarly recommended a modest variance from the Guidelinesrange, recommending a sentence of 42 monthsa imprisonment, albeit for different reasons.

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motivated by personal greed and ambition. While Cohen a as his own submission makes clear aalready enjoyed a privileged life, his desire for even greater wealth and influence precipitated anextensive course of criminal conduct, described below.1. BackgroundCohen is a licensed attorney and has been since 1992. (PSR AP 149.) Until 2007, Cohenpracticed as an attorney for multiple law firms, working on, among other things, negligence andmalpractice cases. (PSR APAP 156-157.) For that work, Cohen earned approximately $75,000 peryear. (Id.) In 2007, Cohen seized on an opportunity. The board of directors of a condominiumbuilding in which Cohen lived was attempting to remove from the building the name of the owner(aIndividual-1a) of a Manhattan-based real estate company (the aCompanya). (PSR AP 155.) Cohenintervened, secured the backing of the residents of the building, and was able to remove the entireboard of directors, thereby fixing the problem for Individual-1. (Id.) Not long after, Cohen washired by the Company to the position of aExecutive Vice Presidenta and aSpecial Counsela toIndividual-1. (Id.) He earned approximately $500,000 per year in that position. (Id.)In January 2017, Cohen formally left the Company and began holding himself out as theapersonal attorneya to Individual-1, who at that point had become the President of the UnitedStates. In January 2017, Cohen also launched two companies: Michael D. Cohen and Associates,P.C., a legal practice, and Essential Consultants LLC, a consulting firm. (PSR AP 152.) Bothbusinesses were operated from the offices of a major law firm located in New York, and that firmpaid Cohen $500,000 per year as salary. (Id.) Cohen also secured a substantial amount ofconsulting business for himself throughout 2017 by marketing to corporations what he claimed tobe unique insights about and access to Individual-1. But while Cohen made millions of dollarsfrom these consulting arrangements, his promises of insight and access proved essentially hollow.

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Documents obtained by the Government and witness interviews revealed that Cohen performedminimal work, and many of the consulting contracts were ultimately terminated.During and subsequent to his employment with the Company, Cohen also maintainedadditional sources of income. Most significantly, Cohen owned taxi medallions in New York Cityand Chicago worth millions of dollars. Cohen held these medallions as investments and leasedthem to operators who paid Cohen a specified monthly rate per medallion. (PSR APAP 158-160.)Cohen has also made substantial investments in real estate and other business ventures. (PSRAPAP 161-162.)2. Cohenas Willful Tax EvasionBetween tax years 2012 and 2016, Cohen evaded taxes by failing to report more than $4million in income to the Internal Revenue Service (aIRSa), which resulted in the avoidance ofmore than $1.4 million due to the United States Treasury Department. Specifically, Cohen failedto report several different streams of income on his tax returns, which he swore were true andaccurate. (PSR APAP 18-19.)The largest source of undisclosed income was more than $2.4 million that Cohen receivedfrom a series of personal loans that he made to a taxi operator to whom Cohen leased certain ofhis Chicago taxi medallions (aTaxi Operator-1a), between 2012 and 2015, for a total principal of$6 million. Each of these loans carried an interest rate in excess of 12 percent. Cohen funded themajority of these loans from a line of credit with an interest rate of less than 5 percent (such thatCohen was earning a substantial spread on the difference between the two loan rates). At Cohenasdirection, Taxi Operator-1 made the interest payment checks to Cohen personally. The checkswere deposited in Cohenas personal bank account or in an account in his wifeas name. In total,Cohen received more than $2.4 million in interest payments from Taxi Operator-1 between 2012

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and 2016. Cohen did not inform his accountant of this arrangement or provide him withdocumentation in support of these loans and interest payments, and intentionally reported none ofthat income to the IRS in order to hide it and evade paying taxes. (PSR APAP 20-23.)Cohen also concealed more than $1.3 million in income he received from another taxioperator to whom Cohen leased some of his New York taxi medallions (aTaxi Operator-2a). Thisincome took two forms. First, in 2012, Taxi Operator-2 paid Cohen a bonus of at least $870,000to induce Cohen to allow him to operate some of Cohenas taxi medallions. Cohen did not report$710,000 of this bonus payment. (PSR AP 25). In addition, Cohen arranged with Taxi Operator-2to receive a portion of the medallion income personally a as opposed to having the income paid toCohenas medallion entities. That is, while most of the medallion income was paid to Cohenasmedallion entities a whose bank statements were provided to his accountant for the purpose ofcalculating the income for these entities and preparing Cohenas tax returns a certain income wasprovided by Taxi Operator-2 directly to Cohen personally and deposited into his personal account.Cohen again chose not to notify his accountant of this arrangement or identify this additionalincome to be reported. (PSR AP 26).Finally, Cohen hid several other sources of income from his accountant and the IRS. Forexample, in 2014, Cohen received $100,000 for brokering the sale of a piece of property in aprivate aviation community in Florida. In 2015, Cohen made approximately $30,000 in profitfrom the sale of a rare and highly valuable French handbag. In 2016, Cohen received more than$200,000 in consulting income from an assisted living company. Cohen reported none of this tothe IRS or his accountant. (PSR AP 27.)Cohenas evasion of these taxes was willful.

In his sentencing submission and his

submissions to the Probation Department in connection with the preparation of the PSR, Cohen

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repeatedly attempted to minimize the seriousness of his decision not to report millions of dollarsof income over a period of years by blaming his accountant for not uncovering the unreportedincome. Specifically, Cohenas submission to the Probation Department asserted that aall relevantbank records were provided annually by Cohen to [his accountant] for the relevant years.a (PSRat 45). Cohen repeats these efforts to blame his accountant in his sentencing submission:Michaelas case stands out for comparative purposes in that a failure to reasonablyidentify all income to a tax preparer who received all client-related bank statementsis quite different in kind from the sophisticated and complex schemes typical ofcriminal tax evasion cases.(Def. Mem. at 15) (emphasis added). Cohenas assertions are simply false. As the Governmentwas prepared to prove at trial, the defendant did not provide his accountant with aall client-relatedbank statementsa (Def. Mem. at 15 n.8), and the information Cohen did provide to his accountantcould not have led his accountant to uncover the unreported income. Between 2014 and 2016, butnot for 2012 or 2013, Cohen provided his accountant with certain bank records and instructed hisaccountant to identify potential tax deductions. Cohenas accountant did not go through Cohenasbank statements looking for potential sources of income, nor did Cohen ever request this. Indeed,Cohen routinely refused to pay for any work by his accountant not specifically approved by Cohen.In addition, even if Cohenas accountant had gone beyond the agreed scope of theassignment, the accountant was not provided with records that would have allowed him toreasonably identify the unreported income. Specifically, the bank records Cohen provided to hisaccountant were limited to monthly statements and did not include images of deposited checks ordeposit slips. The records thus included reference to certain adeposita or acredita entries inparticular amounts, but did not include additional detail that would have allowed the accountant toidentify the source of these deposits or credits. For example, a page from Cohenas bank recordsfrom May 12, 2015 included a $15,312.50 adeposit.a While the Officeas investigation identified

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this as a loan interest payment from Taxi Operator-1 to Cohen, his accountant had no informationindicating the source of the deposit, nor that it concerned interest income that source was payingto Cohen. In sum, any bank records provided by Cohen to his accountant awere insufficient for[the accountant] to identify additional sources of income absent additional information fromCohen.a (PSR at 47.) As the Probation Department noted in evaluating Cohenas efforts to blamehis accountant for Cohenas voluntary and intentional efforts to evade taxes, athe defendantascontention that he provided the accountant with all relevant bank records appears to minimize hisresponsibility in the instant offense and attempts to place the burden on his accountant.a (PSR at46).Finally, not only did Cohen fail to identify the unreported income for Accountant-1, on atleast two occasions Cohen took steps to conceal the interest income he was receiving from TaxiOperator-1. Specifically, in a memorandum that Cohenas accountant prepared in 2013 whenCohen became a client, the accountant flagged the fact that a personal financial statement preparedby Cohenas prior accountant ashows Loans Receivables of $4,250,000, but there is no relatedinterest income reported on your 2012 personal income tax returns relative to this loan.a Cohenand his accountant did not discuss the aloans receivablesa further at the time because Cohen toldhis accountant he did not ask for and would not pay for the memorandum. Later, when Cohenasaccountant was helping him prepare an updated personal financial statement to provide to Bank2, discussed below, in connection with the renegotiation of certain medallion loans, Cohen crossedout the aloans receivablea line item altogether from his personal financial statement, leading hisaccountant to conclude that the entry was mistaken and there was no outstanding personal loan, orthat it had been paid off, neither of which was true.

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3. Cohenas False Statements to Financial InstitutionsIn December 2015, Cohen contacted a bank (aBank-3a) to apply for a home equity line ofcredit (aHELOCa). In his application for the HELOC, Cohen made false statements about his networth and monthly expenses. Specifically, Cohen failed to disclose more than $20 million in debthe owed to another bank (aBank-2a), and also materially understated his monthly expenses toBank-3 by omitting at least $70,000 in monthly interest payments due to Bank-2 on that debt.(PSR AP 34). These statements were the latest in a series of false statements Cohen made to financialinstitutions in connection with credit applications.By way of background, by February 2013, Cohen had obtained a $14 million line of creditfrom another bank (aBank-1a), collateralized by his taxi medallions.2 In November 2014, Cohenrefinanced this medallion debt at Bank-1 with Bank-2.3 The transaction was structured as apackage of individual loans to the entities that owned Cohenas New York medallions, totalingmore than $20 million, and personally guaranteed by Cohen. Following the closing of these loans,the $14 million line of credit with Bank-1 was closed. (PSR APAP 28-30.)In 2013, Cohen made a successful application to Bank-3 a the bank to which he later wouldmake false statements in connection with the HELOC application a for a mortgage on his ParkAvenue condominium. In that application, Cohen did not disclose the $14 million line of credithe had with Bank-1 at the time. (PSR AP 31.)In February 2015, Cohen attempted to secure financing from Bank-3 to purchase a summerhome for approximately $8.5 million. Once again, he concealed the $14 million line of credit,

2

Cohen separately maintained a $6.4 million medallion-related loan with Bank-1. This loan wasdisclosed in Cohenas subsequent credit applications to Bank-2 and Bank-3.3

Bank-2 shared the debt with a New York-based credit union, pursuant to a participationagreement. For ease of reference, this memorandum will simply refer to the debt at Bank-2.

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which by this point took the form of the $20 million in refinanced loans with Bank-2. Inconnection with the summer home application, Cohen had to go to great and deliberate lengths tokeep the debt hidden from Bank-3. Specifically, in connection with this proposed transaction,Bank-3 obtained a personal financial statement that Cohen had provided to Bank-2 in connectionwith the $20 million refinancing with Bank-2 in 2014. This personal statement listed the $14million line of credit Cohen was seeking to refinance and increase with Bank-2. A representativeof Bank-3 specifically asked Cohen about the $14 million line of credit reflected on that statement(which, as noted, had not been reflected on Cohenas 2013 application to Bank-3 for a mortgage).Cohen falsely stated that the $14 million line of credit was undrawn and that he would close it. Intruth, Cohen had effectively overdrawn the line of credit, by swapping it out for a fully drawn,larger $20 million loan from Bank-2. Moreover, when Bank-3 informed Cohen that it would onlyprovide financing if Cohen closed the line of credit, Cohen lied again, misleadingly stating in anemail that a[t]he medallion line was closed in the middle of November 2014.a (PSR APAP 32-33.)This series of lies culminated in Cohenas application for a HELOC. As noted, Cohen failedto disclose the more than $20 million in refinanced medallion liability on that application, andBank-3 had no reason to question Cohen about the omission of this liability, because he hadaffirmatively told the bank that the $14 line of credit was closed.In addition to failing to disclose more than $20 million in medallion liability, Cohen alsointentionally omitted the tens of thousands in monthly interest payments he was making on thatdebt. Cohenas monthly cash flow or adebt ratioa of expenses to income was a core component ofBank-3as underwriting processes that considered an applicantas ability to make loan payments andguard against the bankas need to enter into lengthy foreclosure proceedings. In evaluatingprospective loans, Bank-3 typically required that a borroweras monthly expenses represent no more

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than 45 percent of his monthly income. Based on the incomplete information contained in theHELOC application, Cohenas debt ratio appeared to be below the benchmark set by Bank-3. HadCohen truthfully disclosed his expenses, including the extent of the monthly interest payments hewas required to make to Bank-3, Cohenas debt ratio would have significantly exceeded thebenchmark. In April 2016, Bank-3 approved Cohen for a $500,000 HELOC, which it would nothave approved but for Cohenas concealment of truthful information about his financial condition.(PSR APAP 34-35.)Notably, each of the foregoing false statements involved Cohen overstating his assets orunderstating his liabilities, as in these instances it served his purposes to appear to have a highernet worth. In contrast, when it served Cohenas purposes to understate his net worth to financialinstitutions, he did so by concealing income and assets from his creditors. Specifically, documentsand witness interviews from the Governmentas investigation revealed that in 2017 and early 2018,Cohen wanted Bank-2 to restructure his more than $20 million in medallion debt on terms morefavorable to Cohen. Cohen thus shifted gears, halting monthly payments to Bank-2 and falselyrepresenting orally and in writing that he had a negative net worth and less than $1.5 million incash, despite his receipt of nearly $4 million in aconsultinga fees between January 2017 and March2018. By early April 2018, Bank-2 and Cohen reached a deal in principle, premised on Bank-2asreceipt of an updated personal financial statement confirming, in writing, the negative financialinformation represented by Cohen. On April 9, 2018, the FBI executed a series of search warrantson Cohen, including at his residence, hotel, and office, which put him on notice that he was beinginvestigated for, among other things, bank fraud and explicitly referenced Bank-2. Following theexecution of the warrants, counsel for Cohen informed Bank-2 that Cohen would be unable at thattime to provide the previously promised updated personal financial statement. To save the deal,

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Cohen agreed to post his Park Avenue residence as collateral, which he had previously refused todo. An updated financial statement Cohen provided at closing reflected a positive $17 million networth in addition to previously undisclosed liquid assets, a nearly $20 million increase from thefalse financial information Cohen had provided to Bank-2 just weeks earlier in the negotiations.Thus, the false statement to Bank-3 to which Cohen pleaded guilty was far from an isolatedevent: It was one in a long-series of self-serving lies Cohen told to numerous financial institutions.4. Cohenas Illegal Campaign ContributionsOn approximately June 16, 2015, Individual-1, for whom Cohen worked at the time, beganan ultimately successful campaign for President of the United States. Cohen had no formal titlewith the campaign, but had a campaign email address, and, at various times advised the campaign,including on matters of interest to the press. Cohen also made media appearances as a surrogateand supporter of Individual-1. (PSR AP 39).During the campaign, Cohen played a central role in two similar schemes to purchase therights to stories a each from women who claimed to have had an affair with Individual-1 a so asto suppress the stories and thereby prevent them from influencing the election. With respect toboth payments, Cohen acted with the intent to influence the 2016 presidential election. Cohencoordinated his actions with one or more members of the campaign, including through meetingsand phone calls, about the fact, nature, and timing of the payments. (PSR AP 51). In particular, andas Cohen himself has now admitted, with respect to both payments, he acted in coordination withand at the direction of Individual-1. (PSR APAP 41, 45). As a result of Cohenas actions, neitherwoman spoke to the press prior to the election. (PSR AP 51).Cohen Causes the Magazine to Pay Woman-1In approximately June 2016, a model and actress (aWoman-1a) began attempting to sell

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her story of her alleged extramarital affair with Individual-1. Woman-1 knew that the story wouldbe of considerable value because of Individual-1as candidacy for president. Woman-1 retained anattorney (aAttorney-1a) to represent her in this matter. (PSR AP 41).Attorney-1 then contacted the editor-in-chief (aEditor-1a) of a popular tabloid magazine(aMagazine-1a) and offered to sell the story to Magazine-1. The Chairman and Chief ExecutiveOfficer (aChairman-1a) of the media company that owns Magazine-1 (aCorporation-1a) had aprior relationship with Individual-1 and Cohen. In August 2014, Chairman-1 had met with Cohenand Individual-1, and had offered to help deal with negative stories about Individual-1asrelationships with women by identifying such stories so that they could be purchased and akilled.aConsistent with that offer, after Editor-1 told Chairman-1 about Woman-1as story, they contactedCohen to tell him about the offer. (PSR APAP 40-41).At Cohenas urging and with his promise that Corporation-1 would be reimbursed, Editor1 began negotiating the purchase of Woman-1as story. On August 5, 2016, Corporation-1 enteredinto an agreement with Woman-1 to acquire the alimited life rightsa to the story of her relationshipwith aany then-married man,a in exchange for $150,000 and a commitment to feature her on twomagazine covers and publish over one hundred magazine articles authored by her.

The

agreementas principal purpose was to suppress Woman-1as story so as to prevent the story frominfluencing the election. (PSR APAP 41-42).Between August 2016 and September 2016, Cohen agreed with Chairman-1 to assign therights to the non-disclosure portion of Corporation-1as agreement with Woman-1 to Cohen for$125,000. Cohen then incorporated a shell entity called aResolution Consultants LLCa to be usedin the transaction. Both Chairman-1 and Cohen ultimately signed the agreement, and a consultantfor Corporation-1, using his own shell entity, provided Cohen with an invoice for the payment of

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$125,000. That assignment was never completed, however. (PSR APAP 43-44).Cohen Pays Woman-2On October 8, 2016, an agent for an adult film actress (aWoman-2a) informed Editor-1 thatWoman-2 was willing to make public statements and confirm on the record her alleged past affairwith Individual-1. Chairman-1 and Editor-1 contacted Cohen and put him in touch with Attorney1, who was also representing Woman-2. Over the course of the next few days, Cohen negotiateda $130,000 agreement with Attorney-1 to purchase Woman-2as silence. Cohen received a signedconfidential settlement agreement and a separate side letter from Attorney-1. (PSR AP 45).Cohen did not immediately execute the settlement agreement, nor did he pay Woman-2.On the evening of October 25, 2016, with no final deal in place with Woman-2, Attorney-1 toldEditor-1 that Woman-2 was close to completing a deal with a media outlet, under which she wouldmake her story public. Editor-1 texted Cohen that a[w]e have to coordinate something on thematter [Attorney-1 is] calling you about or it could look awfully bad for everyone.a Chairman-1and Editor-1 then called Cohen through an encrypted telephone application. Cohen agreed to makethe payment and then called Attorney-1 to finalize the deal. (PSR AP 46).On October 26, 2016, Cohen emailed an incorporating service to obtain the corporateformation documents for another shell corporation, Essential Consultants, LLC, which he hadincorporated a few days prior. That afternoon, he directed that $131,000 from his HELOC a thesame HELOC he had obtained by means of false statements, see p. 8-10, supra a be deposited intoan account he had just opened in the name of Essential Consultants LLC. The next day, Cohenwired $130,000 from that account to Attorney-1. On the wire form, Cohen falsely indicated thatthe purpose of the wire was to pay a aretainer.a On November 1, 2016, Cohen received copies ofthe final, signed confidential settlement agreement and side letter agreement from Attorney-1.

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(PSR APAP 47-50).After the election, Cohen sought reimbursement for election-related expenses, includingthe $130,000 payment he had made to Woman-2. Cohen presented an executive of the Companywith a copy of a bank statement reflecting the $130,000 wire transfer. Cohen also requestedreimbursement of an additional $50,000, which represented a claimed payment for campaignrelated atech services.a Executives of the Company agreed to reimburse Cohen by adding$130,000 and $50,000, agrossing upa that amount to $360,000 for tax purposes, and adding a$60,000 bonus, such that Cohen would be paid $420,000 in total. Executives of the Companydecided to pay the $420,000 in monthly installments of $35,000 over the course of a year. (PSRAPAP 52-53).At the instruction of an executive for the Company, Cohen sent monthly invoices to theCompany for these $35,000 payments, falsely indicating that the invoices were being sent pursuantto a aretainer agreement.a The Company then falsely accounted for these payments as alegalexpenses.a In fact, no such retainer agreement existed and these payments were not alegalexpensesa a Cohen in fact provided negligible legal services to Individual-1 or the Company in2017 a but were reimbursement payments. Cohen then received the $420,000 during the courseof 2017. (PSR APAP 54-56).5. Cohenas False Statements to CongressCohen also deliberately made false statements to the Congress. The offense conductregarding Cohenas false statements in set forth in the sentencing submission being filed by theSCO in 18 Cr. 850 (WHP). (See also PSR APAP 62-73).B.

Cohenas Meetings with Law EnforcementSince his guilty plea, Cohen has provided information to various law enforcement entities,

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including representatives of this Office and the SCO. As set forth in the submission being filedby the SCO in 18 Cr. 850 (WHP), this Office understands that the information provided by Cohento the SCO was ultimately credible and useful to its ongoing investigation.To be clear, neither the SCO nor this Office is making a motion under U.S.S.G. ASS 5K1.1.No such motion is being made because, as detailed herein, Cohen repeatedly declined to providefull information about the scope of any additional criminal conduct in which he may have engagedor had knowledge. However, this Office acknowledges and agrees that Cohenas provision ofinformation to the SCO in connection with its investigation is a mitigating factor that the Courtshould consider in imposing sentence. Indeed, Cohenas provision of information to the SCO is thereason that this Office is not seeking a Guidelines sentence here, but rather is acknowledging thata modest variance is appropriate.While Cohenas provision of information to the SCO merits credit, his description of hisactions as arising solely from some apersonal resolvea a as opposed to arising from the pendencyof criminal charges and the desire for leniency a ignores that Cohen first reached out to meet withthe SCO at a time when he knew he was under imminent threat of indictment in this District. Assuch, any suggestion by Cohen that his meetings with law enforcement reflect a selfless andunprompted about-face are overstated.With respect to Cohenas provision of information to this Office, in its two meetings withhim, this Office assessed Cohen to be forthright and credible, and the information he provided waslargely consistent with other evidence gathered. Had Cohen actually cooperated, it could havebeen fruitful: He did provide what could have been useful information about matters relating toongoing investigations being carried out by this Office. But as Cohen partially acknowledges, itwas his decision not to pursue full cooperation, and his professed willingness to continue to provide

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information at some later unspecified time is of limited value to this Office, both because he isunder no obligation to do so, and because the Officeas inability to fully vet his criminal history andreliability impact his utility as a witness.Indeed, his proffer sessions with the SCO aside, Cohen only met with the Office about theparticipation of others in the campaign finance crimes to which Cohen had already pleaded guilty.Cohen specifically declined to be debriefed on other uncharged criminal conduct, if any, in hispast.4 Cohen further declined to meet with the Office about other areas of investigative interest.As the Court is undoubtedly aware, in order to successfully cooperate with this Office, witnessesmust undergo full debriefings that encompass their entire criminal history, as well as any and allinformation they possess about crimes committed by both themselves and others. This processpermits the Office to fully assess the candor, culpability, and complications attendant to anypotential cooperator, and results in cooperating witnesses who, having accepted full responsibilityfor any and all misconduct, are credible to law enforcement and, hopefully, to judges and juries.Cohen affirmatively chose not to pursue this process. Cohenas efforts thus fell well short ofcooperation, as that term is properly used in this District.5For this reason, Cohen is not being offered a cooperation agreement or a 5K1.1 letter.

4

At the time that Cohen met twice with this Office, through his attorneys, he had expressed that hewas considering a but not committing to a full cooperation. Cohen subsequently determined not to fullycooperate.Cohenas provision of information to the Office of the New York Attorney General (aNY AGa)warrants little to no consideration as a mitigating factor. This Officeas understanding is that the informationCohen provided was useful only to the extent that he corroborated information already known to the NYAG. More importantly, Cohen provided information to the NY AG not as a cooperating witness who wasexposing himself to potential criminal or civil liability but instead as a witness who could have beencompelled to provide that testimony. Fulfilling that basic legal responsibility voluntarily does not warranta reduced sentence a particularly when one waits until he is charged with federal crimes before doing so.Similarly, this Officeas understanding is that the New York State Department of Taxation and FinancialServices (aNYSDTFa) subpoenaed Cohen for information about the payment of his own state taxes, andany claimed acooperationa with NYSDTF appears to consist solely of providing that entity informationthat they would otherwise have obtained via subpoena.5

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Within the confines of the SCO investigation itself, the Office does not dispute that Cohenasassistance to the SCO was significant. But because Cohen elected not to pursue more fulsomecooperation with this Office, including on other subjects and on his own history, the Office cannotassess the overall level of Cohenas cooperation to be significant. Therefore, the Office submitsthat, in fashioning a sentence on its case, the Court afford Cohen credit for his efforts with theSCO, but credit that accounts for only a modest variance from the Guidelines range and does notapproach the credit typically given to actual cooperating witnesses in this District.APPLICATION OF THE SENTENCING GUIDELINESA.

The Probation Departmentas CalculationThe Office agrees with the Probation Departmentas calculation of the total offense level as

24, see PSR AP 110, and the Criminal History Category as I, see PSR AP 114. Based upon thesecalculations, Cohenas advisory Guidelines range is 51 to 63 monthsa imprisonment. (PSR AP 174.)B.

Cohenas Challenges to the Guidelines CalculationCohen challenges the Probation Departmentas calculation on two grounds. (Def. Mem. at

22-26.) Each claim is meritless.1. The PSRas Grouping Analysis is CorrectCohen claims that the Probation Departmentas grouping of the tax evasion counts with theother counts in Information 18 Cr. 602 was incorrect because the counts are not aclosely related.aThis argument is contrary to the text of the applicable Guidelines and controlling Second Circuitprecedent.The PSR groups all eight counts in Information 18 Cr. 602 pursuant to U.S.S.G. ASS 3D1.2,which provides that a[a]ll counts involving substantially the same harm shall be grouped together

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into a single Group.a6 Subsection (d) of the Guideline specifies that asubstantially the same harmaincludes a[w]hen the offense level is determined largely on the basis of the total amount of harmor loss.a U.S.S.G. ASS 3D1.2(d). The subsection also includes a list of specifically enumeratedGuidelines that are to be grouped. Id. All three of the Guidelines at issue here a U.S.S.G. ASS 2B1.1,which applies to the false statements count, ASS 2C1.8, which applies to the illegal campaigncontribution counts, and ASS 2T1.1, which applies to the tax evasion counts a are included on thatlist. Thus, using the plain text of the Guidelines, all of the offenses here should be grouped.7 Thecommentary to the Guidelines further supports this conclusion. It states that acounts involvingoffenses to which different offense guidelines apply are grouped together under subsection (d) ifthe offenses are of the same general type,a and further specifies that a[t]he asame general typea ofoffense is to be construed broadly.a U.S.S.G. ASS 3D1.2 app. n. 6.Second Circuit case law supports the plain-text reading of the Guidelines. The SecondCircuit has held that Section 3D1.2(d) must be used to group tax crimes with fraud and otheroffenses for which the offense level is principally determined by the amount of loss. United Statesv. Gordon, 291 F.3d 181, 192 (2d Cir. 2002); see also United States v. Fitzgerald, 232 F.3d 315,320 (2d Cir. 2000) (holding that tax evasion, fraud and conversion should be grouped underSection 3D1.2(d) because they are offenses of the same general type); United States v. Petrillo,

6

The false statements to Congress count charged in 18 Cr. 850 does not group with the othercounts, but it does not affect the Guidelines calculation. (PSR AP 88).7

Cohen argues that the listing of specific Guidelines in this subsection does not make groupingmandatory. See Def. Mem. at 23 (citing United States v. Napoli, 179 F.3d 1, 9 n.4 (2d Cir. 1999)). Butsaying that grouping is not mandatory does not mean that it is not appropriate a particularly where, as here,the Guidelines in question are each ones in which the offense level is determined largely on the basis of thetotal amount of loss. See Napoli, 179 F.3d at 9 n.4 (citing as an example where grouping would not beappropriate fraud and drug counts, because one measures harm by dollar losses whereas the other measuresharm by drug weights). Here, each of the listed offenses measures harm by dollar amounts, meaning thatNapoli, cited by Cohen, actually supports the Officeas position.

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237 F.3d 119, 124-25 (2d Cir. 2000) (holding that tax evasion and mail fraud should be groupedunder Section 3D1.2(d)); United States v. Bernstein, 43 Fed. Appax 429, 431 (2d Cir. 2002)(affirming grouping of mail fraud and tax fraud offenses under Section 3D1.2(d)).8Cohen attempts to distinguish Petrillo, arguing that the tax and mail fraud offenses in thatcase were factually intertwined and that it was decided at a time when the tax and fraud tables hadthe same thresholds. (Def Mem. at 24). But even if Petrillo were read as limited to the facts ofthat case, Gordon resolves any uncertainty. Analyzing Petrillo and Fitzgerald, the Second Circuitheld in Gordon that even if those cases do not require grouping under Section 3D1.2(d), thestructure of the Guidelines does in fact arequirea that acrimes falling within the special categoryof quantifiable-harm offensesa be grouped under ASS 3D1.2(d). Gordon, 291 F.3d at 193. That wasso even though, at the time, the tax and fraud offense tables no longer had identical thresholds.Nevertheless, the Circuit held that the district court committed clear and obvious error by notapplying Section 3D1.2(d) to group the fraud and tax evasion offenses in that case. Id.9Moreover, Cohenas position a that the campaign finance and false statements counts shouldgroup, but the tax evasion counts should not a does not make sense. All three sets of counts areoffenses for which the offense level is based principally on a quantifiable amount of harm or loss,and qualify as offenses of athe same general typea as each other. But even if the foregoingprecedent were set aside, and the phrase ageneral typea were construed narrowly so that tax crimeswere not of the same general type as false statements or campaign finance offenses, then the false

Cohen argues that the avast majority of Circuit courtsa have held otherwise, citing United Statesv. Doxie, 813 F.3d 1340, 1345 (11th Cir. 2016). But as Doxie recognizes, the Second Circuit has concludedthat afraud counts and tax counts should be grouped together under ASS 3D1.2(d).a Id. at n.3. That holdingis binding here in the Second Circuit.8

9

The concurrence in Gordon cited by Cohen did not command a majority of the panel and thus isnot controlling precedent.

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statements and campaign finance crimes would similarly not be of the same ageneral type.aIndeed, the false statements and campaign finance crimes are no more similar as a general matteror related as a factual matter than the tax crimes are with the other offenses. Thus, there is norational basis to group some but not all of the offenses in this case. 102. The Guidelines Enhancements Are Not aOverlappingaIn the plea agreement, the parties have stipulated that two-level enhancements arewarranted for both (i) Cohenas used of asophisticated means,a and (ii) his use of his aspecial skillaas a licensed attorney in a manner that significantly facilitated the commission and concealmentof his crimes. The PSR also applies these enhancements. (PSR APAP 92, 94). While not contestingtheir applicability as a legal matter, Cohen argues that they address overlapping conduct, such thatthe resulting Guidelines range overstates the offense. (Def. Mem. at 24-25). This argument ismeritless. The asophisticated meansa and aspecial skilla enhancements address different aspectsof Cohenas conduct, and each serves a unique purpose under the Guidelines.The asophisticated meansa enhancement is addressed to Cohenas use of complex means tocarry out and disguise his crimes. For example, Cohen created shell companies for his commissionof the campaign finance crimes, including one shell entity (Resolution Consultants) for use in thetransaction with Woman-1 and another shell entity (Essential Consultants) for use in thetransaction with Woman-2. (PSR APAP 43, 47.) Cohen also agreed to structure the reimbursementfor his payment to Woman-2 in monthly installments, and to disguise those payments by creatingfake invoices that referenced a non-existent aretainer.a (PSR AP 54.) These actions clearlyconstitute the use of asophisticated means,a and Cohen does not and cannot argue to the contrary.See, e.g., U.S.S.G. ASS 2B1.1 cmt. n. 9(B) (a[c]onduct such as hiding assets or transactions, or both,If that were the case a that none of the counts grouped a then the total offense level would likelybe 27, yielding a much higher Guidelines range of 70 to 87 monthsa imprisonment.10

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through the use of fictitious entities [or] corporate shells . . . ordinarily indicates sophisticatedmeansa); United States v. Amico, 416 F.3d 163, 169 (2d Cir. 2005) (creation of false bankdocuments, appraisals, and blueprints constituted sophisticated means); see also United States v.Regensberg, 381 F. Appax 60, 62 (2d Cir. 2010) (creation of fake loan documents and fraudulentearnings statements constituted sophisticated means).By contrast, the aspecial skilla enhancement is directed at a different aspect of Cohenasconduct a his use of his education, training, and licensure as an attorney to facilitate and concealthe campaign finance crimes. For example, in order to facilitate the hush money payment toWoman-2, Cohen used his skills and experience as an attorney to negotiate and finalize asettlement agreement with Woman-2, which included both a principal agreement and a separateside letter that was designed specifically to conceal the identities of the parties. (PSR AP 45).Moreover, Cohenas role as the attorney for one of the individuals involved in both settlementagreements allowed him to use his position to attempt to cloak his criminal conduct under the veilof attorney-client privilege. Indeed, in conversations he recorded with reporters, he claimed thatbeyond his public statements on the matter, he could not answer questions about his role in thepayments because of attorney-client privilege. This sort of conduct implicates the aspecial skillaenhancement. See, e.g., United States v. Mancuso, 428 Fed. Appx. 73, 2011 WL 2580228, at *7(2d Cir. June 30, 2011) (enhancement warranted where attorney used legal skills to create a powerof attorney, draft a backdated partnership agreement, and form a company in furtherance of theoffense); United States v. Kelly, 147 F.3d 172, 178 (2d Cir. 1998) (defendant used his skill as anexperienced attorney to prepare an assignment of income in an effort to avoid income tax).These two enhancements are thus directed at different actions that carry unique harms. Forthat reason, Cohenas argument that the enhancements are aoverlappinga and should thus be

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discounted is meritless. See, e.g., United States v. Minneman, 143 F.3d 274, 283 (7th Cir. 1998)(rejecting adouble-countinga argument where the special skill adjustment focused on thedefendantas use of his legal training, while the sophisticated means enhancement was based on hisuse of multiple accounts and corporate names); United States v. Rice, 52 F.3d 843, 851 (10th Cir.1995) (noting that a[t]he purpose of the special skill enhancement is to punish those criminals whouse their special talents to commit crime,a whereas the sophisticated means enhancement isadesigned to target criminals who engage in complicated criminal activity because their actionsare considered more blameworthy and deserving of greater punishment than a perpetrator of asimple version of the crimea).C.

The Probation Departmentas RecommendationTaking into account the factors set forth in 18 U.S.C. ASS 3553(a), including Cohenas age and

background, the nature and circumstances of his offenses, and the need to avoid unwarrantedsentencing disparities, the Probation Department recommends a sentence of 42 monthsaimprisonment and a $100,000 fine. (PSR at 53-54.) The Probation Departmentas recommendationdoes not, however, consider Cohenas provision of information to the SCO.DISCUSSIONA.

A Substantial Term of Imprisonment Is WarrantedAs set forth herein, consideration of the factors set forth in 18 U.S.C. ASS 3553(a) weighs

heavily in favor of a substantial term of imprisonment. In particular, the nature and seriousness ofthe offenses and the need to promote respect for the law and afford adequate deterrence areespecially weighty considerations.1. The Nature and Seriousness of the OffensesIn his submission, Cohen states that athe facts and circumstances surrounding this case are

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unique and unprecedented.a (Def. Mem. at 28-29.) That may be so, but it is not exclusively forthe reasons given by Cohen. It is also unique because Cohen managed to commit a panoply ofserious crimes, all while holding himself out as a licensed attorney and upstanding member of thebar. His offenses strike at several pillars of our society and system of government: the paymentof taxes; transparent and fair elections; and truthfulness before government and in business.First, Cohenas commission of two campaign finance crimes on the eve of the 2016 electionfor President of the United States struck a blow to one of the core goals of the federal campaignfinance laws: transparency. While many Americans who desired a particular outcome to theelection knocked on doors, toiled at phone banks, or found any number of other legal ways to maketheir voices heard, Cohen sought to influence the election from the shadows. He did so byorchestrating secret and illegal payments to silence two women who otherwise would have madepublic their alleged extramarital affairs with Individual-1. In the process, Cohen deceived thevoting public by hiding alleged facts that he believed would have had a substantial effect on theelection.It is this type of harm that Congress sought to prevent when it imposed limits on individualcontributions to candidates. To promote transparency and prevent wealthy individuals like Cohenfrom circumventing these limits, Congress prohibited individuals from making expenditures onbehalf of and coordinated with candidates.

Cohen clouded a process that Congress has

painstakingly sought to keep transparent. The sentence imposed should reflect the seriousness ofCohenas brazen violations of the election laws and attempt to counter the public cynicism that mayarise when individuals like Cohen act as if the political process belongs to the rich and powerful.Cohenas submission suggests that this was but a brief error in judgment. Not so. Cohenknew exactly where the line was, and he chose deliberately and repeatedly to cross it. Indeed, he

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was a licensed attorney with significant political experience and a history of campaign donations,and who was well-aware of the election laws.11 In fact, Cohen publicly and privately took creditfor Individual-1as political success, claiming a in a conversation that he secretly recorded a thathe astarted the whole thing . . . started the whole campaigna in 2012 when Individual-1 expressedan interest in running for President. Moreover, not only was Cohen well aware of what he wasdoing, but he used sophisticated tactics to conceal his misconduct.

He arranged one of the

payments through a media company and disguised it as a services contract, and executed thesecond non-disclosure agreement with aliases and routed the six-figure payment through a shellcorporation. After the election, he arranged for his own reimbursement via fraudulent invoices fornon-existent legal services ostensibly performed pursuant to a non-existent aretainera agreement.And even when public reports of the payments began to surface, Cohen told shifting andmisleading stories about the nature of the payment, his coordination with the candidate, and thefact that he was reimbursed.This was not a blind act of loyalty, as Cohen has also suggested. His actions suggest thatCohen relished the status of ultimate fixer a a role that he embraced as recently as May 2018.12Cohen was driven by a desire to further ingratiate himself with a potential future Presidentaforwhose political success Cohen himself claimed creditaand arranged for the payments in anattempt to increase his power and influence. Indeed, after Cohen caused the media company to

11

Cohen was previously the subject of an FEC complaint for making unlawful contributions toDonald Trumpas nascent campaign for the 2012 presidency. The complaint was dismissed for jurisdictionalreasons, but it certainly put Cohen on notice of the applicable campaign finance regulations. See In theMatter of Donald J. Trump, Michael Cohen, et al., MUR 6462 (Sept. 18, 2013).12

make an illegal expenditure, in a secretly recorded meeting Cohen took credit for the payment andassured Individual-1 that he was aall overa the transaction. And after making the payment to thesecond woman, and after Individual-1 was elected President, Cohen privately bragged to friendsand reporters, including in recorded conversations, that he had made the payment to spareIndividual-1 from damaging press and embarrassment.Cohenas criminal violations of the federal election laws were also stirred, like his othercrimes, by his own ambition and greed. During and after the campaign, Cohen privately toldfriends and colleagues, including in seized text messages, that he expected to be given a prominentrole and title in the new administration. When that did not materialize, Cohen found a way tomonetize his relationship with and access to the President.

Cohen successfully convinced

numerous major corporations to retain him as a aconsultanta who could provide unique insightsabout and access to the new administration. Some of these corporations were then stuck makinglarge up-front or periodic payments to Cohen, even though he provided little or no real servicesunder these contracts. Bank records reflect that Cohen made more than $4 million dollars beforethe contracts were terminated.Second, Cohen undertook similar acts of deception in his private life. He concealedsignificant amounts of income from the IRS, and lied about his financial status in his dealings withbanks. These offenses warrant significant punishment. For at least half a decade, Cohen willfullyevaded paying taxes. Cohen, who himself studied tax in law school and displayed an awarenessof complicated tax laws in real estate transactions, took purposeful steps to avoid paying taxes onmillions of dollars in income over a five-year period. He made private loans at double-digit interestrates and did not report the millions of dollars in income it generated. The fact that these loanswere cash generators was not lost on Cohen: At one point, he offered to sell the loans to other

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investors. Cohen also failed to report hundreds of thousands of dollars in consulting income andlegal work, and underreported payments he received from his ownership of taxi medallions.Cohenas sentencing memorandum attempts to downplay the seriousness of this conduct,labeling it aunsophisticateda because this case does not involve unreported cash transactions,offshore accounts, phony deductions, or obstructive conduct. (Def. Mem. at 14.) But the natureof Cohenas criminal conduct is apparent from the manner in which he dealt with his ownaccountant: Cohen provided incomplete information to his accountant, lied about the existence orvalue of certain assets and income sources, and rebuffed questions that would have revealedincome he deliberately concealed. Moreover, Cohenas crimes were not ones of necessity. To thecontrary, he relied on his unreported income to maintain his opulent lifestyle and purchase luxuryitems. Indeed, in some years, the amount of money that Cohen spent on expenses a includingcredit card bills, fine art purchases, and payments for private school a exceeded the gross amountof income listed on Cohenas tax returns.Third, Cohen similarly flouted his obligation to be truthful in business when seekingfinancing. To secure loans, Cohen falsely understated the amount of debt he was carrying, andomitted information from his personal financial statements, to induce a bank to lend based onincomplete information. To explain why he submitted a false statement to a bank that failed todisclose more than $20 million in liabilities as well as tens of thousands in monthly expenses,Cohen notes that it was his private banker who provided Cohen with an inaccurate application,which Cohen failed to correct. But this was no mere error of omission: As noted above, Cohenwas specifically asked about the omission, and covered it up by misleadingly telling Bank-3 thatthe liabilities had been expunged, when in fact they had been re-established at another bank. Thisfalse statement was the latest in a series of false statements Cohen had made to this banker and

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others. See p. 8-11, supra. And indeed it was one of these prior false statements a in which Cohentold the banker that he had closed the $14 million line of credit in question a that led the banker toomit that liability from the draft of his application.Cohen is loath to acknowledge these false statements to banks. Likewise at his guilty pleaproceeding, the Court had to press Cohen to acknowledge that he understood he was lying to abank. This signals that Cohenas consciousness of wrongdoing is fleeting, that his remorse isminimal, and that his instinct to blame others is strong.

While he has legally accepted

responsibility, the Court should consider at sentencing these transparent efforts at minimizingCohenas false statements and criminal conduct. As the Probation Department recognized inrejecting these arguments, Cohen is attempting ato lessen [his] culpability and place the burden onBank-3.a (PSR at 48.)13Finally, Cohen has pled guilty to making false statements to Congress in connection witha congressional investigation.

This offense is described in detail in the SCOas sentencing

submission.Taken alone, these are each serious crimes worthy of meaningful punishment. Takentogether, these offenses reveal a man who knowingly sought to undermine core institutions of ourdemocracy. His motivation to do so was not borne from naivetA(c), carelessness, misplaced loyalty,or political ideology. Rather, these were knowing and calculated acts a acts Cohen executed in

13

In a further attempt at undermining the seriousness of this offense, Cohen observes that therehas been no monetary loss to any bank. (Def. Mem. at 18.) Financial loss, however, should not be the onlymeasure of the seriousness of the offense. Cohenas argument fails to recognize the important federal interestat stake, which is reflected in the purpose and history of 18 U.S.C. ASS 1014. Section 1014 was designed toaprotect federally insured institutions from losses stemming from false statements or misrepresentationsthat mislead the institutions into making financial commitments, advances, or loans,a and thereby toaprotect the integrity of the system of credit generated and maintained by federally insured banks.a UnitedStates v. Zahavi, No. 12 Cr. 288 (JPO), 2012 WL 5288743, at *2 (S.D.N.Y. Oct. 26, 2012). If borrowersobtain loans based on false information, and cannot fulfill their obligations, that can have tremendousnegative effects on lenders and the banking system as a whole.

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order to profit personally, build his own power, and enhance his level of influence. The natureand seriousness of each of Cohenas crimes warrant a substantial sentence in this case. See 18U.S.C. ASS 3553(a)(1), (2)(A).2. The Need to Promote Respect for the Law and to Afford Adequate DeterrenceThe need for the sentence to promote respect for the law and to afford adequate deterrencefurther supports imposition of a significant sentence of imprisonment. Congress provided forstrong criminal sanctions as a general deterrent to tax evasion, false statements to financialinstitutions, and campaign finance violations. Given the magnitude and brazenness of the conductin this case, the interests of deterrence are best served by the imposition of a substantial term ofimprisonment.Cohenas years-long pattern of deception, and his attempts to minimize certain of thatconduct even now, make it evident that a lengthy custodial sentence is necessary to specificallydeter him from further fraudulent conduct, whether out of greed or for power, in the future.Certainly, Cohen has no prior convictions, and is well-educated and professionally successful.Generally, such characteristics suggest that a defendant is unlikely to re-offend in the future. Butwhere, as here, the nature, multitude, and temporal span of criminal behavior betray a man whoseoutlook on life was often to cheat a an outlook that succeeded for some time a his professionalhistory and lack of prior convictions are not a significant mitigating factor.For much the same reasons, the time-served sentence that Cohen seeks would sendprecisely the wrong message to the public. General deterrence is a significant factor here.Campaign finance crimes, because they are committed in secret and hidden from the victims, aredifficult to identify and prosecute. Nonetheless, they have tremendous social cost, describedabove, as they erode faith in elections and perpetuate political corruption. Effective deterrence of

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such offenses requires incarceratory sentences that signal to other individuals who maycontemplate conduct similar to Cohenas that violations of campaign finance laws will not betolerated. Particularly in light of the public interest in this case, the Courtas sentence may indeedhave a cognizable impact on that problem by deterring future candidates, and their afixers,a all ofwhom are sure to be aware of the Courtas sentence here, from violating campaign finance laws.Additionally, a significant sentence of imprisonment would also generally deter taxevasion and other financial crimes by sending the important message that even powerfulindividuals cannot cheat on their taxes and lie to financial institutions with impunity, because theywill be subject to serious federal penalties. This is particularly important in the context of a taxevasion prosecution. Hundreds of billions of dollars are lost annually because people like Cohena who otherwise take full advantage of all that taxes bring, such as schools, paved roads, transitsystems, and Government buildings a shirk their responsibilities as American taxpayers.Meaningful sentences a that is, ones that, through their terms, speak loudly and clearly a must begiven in cases like this one so that others are forewarned of the consequences for engaging in taxcrimes. As the United States Sentencing Commission has explained, a[b]ecause of the limitednumber of criminal tax prosecutions relative to the estimated incidence of such violations,deterring others from violating the tax laws is a primary consideration underlying these guidelines.Recognition that the sentence for a criminal tax case will be commensurate with the gravity of theoffense should act as a deterrent to would be violators.a U.S.S.G. Ch. 2, Part T, intro. Cmt. Wherethe incidence of prosecution is lower, the level of punishment must be higher to obtain the samelevel of deterrence. See generally Louis Kaplow and Steven Shavell, aFairness Versus Welfare,a114 Harv. L. Rev. 961, 1225-1303 (2001); see also United States v. Hassebrock, 663 F.3d 906,922 (7th Cir. 2011) (affirming as reasonable a within-Guidelines 32-month sentence for a tax

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evader when the district court explained that aa sentence of probation would not promote respectfor the law, but encourage people to flaunt ita). Indeed, a[s]tudies have shown that salientexamples of tax-enforcement actions against specific taxpayers, especially those that involvecriminal sanctions, have a significant and positive deterrent effect.a Joshua D. Blank, In Defenseof Individual Tax Privacy, 61 Emory L.J. 265, 321 (2011-2012). Our system of voluntarycompliance would be undermined if wealthy and successful individuals such as Cohen come tobelieve that the most severe sanctions that they will face, in the relatively unlikely case that theyare caught cheating on their taxes, are the payment of back taxes, interest, and penalties. TheGuidelines therefore recognize the harm tax crimes inflict on society and recommend prisonsentences for cases like this one.In sum, the nature of Cohenas conduct underscores the need for a substantial period ofincarceration as a means both to promote respect for the law and to deter future abuses by otherindividuals seeking improperly to influence the electoral process, evade taxes, or lie to financialinstitutions. 18 U.S.C. ASS 3553(a)(2)(A) & (a)(2)(B).B.

Cohenas Request for a Sentence of Time Served is MeritlessIn his submission, Cohen requests a sentence of time served, which would effectively be a

sentence of a matter of hours a 99.5% lower than what the Sentencing Guidelines and ProbationDepartment recommend.

When considering athe kinds of sentences available,a 18 U.S.C.

ASS 3553(a)(3), this Court should view with great skepticism a request for a nonincarceratory sentence when the Guidelines recommend a substantial prison term. See UnitedStates v. Goldberg, 491 F.3d 668, 673 (7th Cir. 2007) (aWhen the guidelines, drafted by a respectedpublic body with access to the best knowledge and practices of penology, recommend that adefendant be sentenced to a number of years in prison, a sentence involving no . . . imprisonment

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can be justified only by a careful, impartial weighing of the statutory sentencing factors.a). Cohenpresses four principal arguments in support of his request, but none warrants the extraordinaryvariance that he seeks.First, Cohen argues that the emotional toll of his convictions on him and his family, theloss of his law license and other business, and civil tax penalties, aamount[] to an alternative formof punishment,a which warrants a sentence of time served. (Def. Mem. at 26.) They do not.Congress, through the Guidelines, has pointedly addressed and rejected this aIave been punishedenougha argument from privileged citizens who bemoan the collateral consequences of aguidelines sentence to persons like themselves. See 28 U.S.C. ASS 994(d) (aThe Commission shallassure that the guidelines and policy statements are entirely neutral as to . . . socioeconomic statusof offenders.a); U.S.S.G. ASS 5H1.10 (socioeconomic status not relevant); see also U.S.S.G. ASS 5H1.2(vocational skills and education not ordinarily relevant); U.S.S.G. ASS 5H1.5 (employment recordnot ordinarily relevant); U.S.S.G. ASS 5H1.6 (family ties and responsibilities not ordinarily relevant).The federal courts have repeatedly agreed. See, e.g., United States v. Prosperi, 686 F.3d 32, 47(1st Cir. 2012) (a[I]t is impermissible for a court to impose a lighter sentence on white-collardefendants than on blue-collar defendants because it reasons that white-collar offenders suffergreater reputational harm or have more to lose by conviction.a); United States v. Musgrave, 761F.3d 602, 608a09 (6th Cir. 2014) (impermissible for the district court to rely heavily on the factthat the defendant had already abeen punished extraordinarilya through years of legal process, theloss of his CPA license, and his felony conviction).There is nothing about Cohenas family circumstances warranting the extraordinarysentence that he seeks. On the contrary, rather than a factor warranting any decreasedimprisonment, Cohenas education, resources and opportunities should, in the event that they are

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relevant at all, weigh in favor of holding him to an exacting standard. Cohen did not need tocommit the crimes that he did, yet he committed them for personal gain. He was motivated in partby greed and the desire to live an opulent and lavish lifestyle. And for all of Cohenas outwardrectitude, he has lived a double life, which weighs heavily against a variance. While Cohen hassubmitted letters describing his good nature, the evidence collected and witnesses interviewed inthis investigation paint a decidedly different picture a a picture of someone who was threateningand abusive when he wanted to get his way. For instance, in 2015, Cohen threatened a journalistfor investigating a negative story about Individual-1, telling him:I will make sure that you and I meet one day while weare in the courthouse. And Iwill take you for every penny you still donat have. And I will come after your[employer] and everybody else that you possibly know. . . . So Iam warning you,tread very fucking lightly, because what Iam going to do to you is going to befucking disgusting. You understand me?14On another call a which Cohen secretly recorded a with bankers from Bank-2 with whom Cohenwas seeking to renegotiate his medallion debt on terms more favorable to him, Cohen threatened:Iam gonna teach [the bank and its government conservator] a lesson theyave neverseen before in their life. Because Iam gonna hit everybody up with a lawsuit thatasgonna spin everyoneas head. And Iam looking forward to that, by the way. And Iamnot saying it as a threat. Itas a fact.Cohen himself said in an interview in 2011 that, aIf you do something wrong, Iam going to comeat you, grab you by the neck and Iam not going to let you go until Iam finished.a 15 These are justa few of the many examples of Cohenas abuse of both his standing as an attorney and hisrelationship to a powerful individual a examples of the type of conduct that is repugnant fromanyone, let alone an attorney of the bar. They stand in marked contrast to the letters of support for

14

The full recording is available at: www.npr.org/player/embed/615843930/615845621.

Cohen.On balance, like most others who stand before this Court for sentence, Cohen is neither allgood nor all bad. His personal interactions in private life should not be this Courtas principalconsideration. Rather, it is Cohenas serious crimes that should be the Courtas lodestar.Second, in support of his argument for a time-served sentence, Cohen makes mention ofhis financial support and fundraising for his childrenas former school, as well as his support forother charitable causes. (Def. Mem. at 9-11.) But charitable aand similar prior good works arenot ordinarily relevant in determining whether a sentence should be outside the applicableguideline range.a

U.S.S.G. ASS 5H1.11.

For good reason: Prior charitable works, however

commendable and extensive, by professionally successful defendants rarely, if ever, are materiallymitigating factors at sentencing because courts recognize that it is not extraordinary for suchdefendants to be involved in charities and to have strong professional and personal relationships.See, e.g., United States v. Barbera, No. 02 Cr. 1268 (RWS), 2005 WL 2709112, at *12-13(S.D.N.Y. Oct. 21, 2005); see also United States v. Fishman, 631 F. Supp. 2d 399, 403 (S.D.N.Y.2009) (a defendantas agood name and good worksa should not serve as athe human shield he raisesto seek immunity or dramatic mitigation of punishment when he is caughta). Moreover, it is nodoubt far easier to give generously to charities when the donor is simultaneously evading thepayment of taxes on millions of dollars in income. Cohen was, in effect, donating other peopleasmoney. As Chief Judge McMahon has explained, aUsing other peopleas money to do whatqualifies as good works by your likes and then suggesting to me that I give you credit for the factthat you didnat use the money to buy a Lamborghini is something that I find and have always foundto be contemptible, especially since all too frequently charity is a means to bolster the esteem inwhich one is held by others.a United States v. Binday, 12 Cr. 152 (CM), Dkt. 349, at 44-45.

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Third, in support of his request for a time-served sentence, Cohen cites several cases inwhich the defendant received little or no jail time. (Def. Mem. at 15-17, 19-20.) The cases selectedby Cohen do not bear any particular factual similarity to the instant case. Indeed, in none of thecases cited by Cohen did the defendant commit the particular array of crimes that Cohen has. Asset forth below, the Court can just as easily identify numerous examples of cases where moresubstantial sentences were imposed. Thus, the cases cited by Cohen do not provide a template forsentencing in this matter, and the Court must decide it based on the particular facts andcircumstances of this case.For instance, Cohen highlights United States v. Lacy Doyle as a case in which Judge Carterimposed a non-incarceratory term of four yearsa probation. Cohen fails, however, to acknowledgethat the advisory guidelines range in that case was just 6 to 12 monthsa imprisonment based on aguilty plea to one count of subscribing to a false and fraudulent tax return for a single year.16Cohen also highlights the sentence imposed in the prosecution of Earl Simmons, a tax evasion casein which the defendant received a year of imprisonment. In that case, Judge Rakoff focused onthe need for imprisonment in tax evasion cases, regardless of their complexity, to ensure generaldeterrence: aPeople who are considering tax evasion . . . greatly exaggerate their chances of gettingaway with it . . . . That is why prison is important.a Sent. Tr. at 32, United States v. Earl Simmons,17 Cr. 172 (JSR) (S.D.N.Y. Mar. 23, 2018) (ECF No. 39). While it is true that the methods bywhich Simmons evaded taxes may have been more complex than here, both men made thecalculated decision that they could get away with not paying taxes. Finally, in contrast toSimmons, tax evasion is but one of the crimes for which sentence is to be imposed in this case.Cohen also overlooks several tax evasion cases in which courts have recently imposed

16

In addition, because the advisory guidelines in Doyle were in Zone B, a term of probation wasconsidered explicitly authorized. U.S.S.G. ASS 5B1.1(a)(2).

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custodial terms. See United States v. Trupin, 475 F.3d 71, 76 (2d Cir. 2007) (holding that sevenmonth prison sentence for multi-year tax evasion scheme with a tax loss of $1.2 million failed toreflect seriousness of offense, observing that a tax evader, in effect, asteal[s] from his fellowtaxpayers through his deceptionsa); Sent. Tr. at 22-23, United States v. Joseph Ciccarella, 16 Cr.738 (AKH) (S.D.N.Y. March 3, 2017) (imposing an 18-month sentence for a defendant whocaused a tax loss between $250,000 and $550,000, noting that athe obligation to pay taxes is basicto our civilizationa). Finally, in United States v. Erwin Mayer, 09 Cr. 581 (WHP), this Courtimposed a custodial term of imprisonment on a cooperating defendant whose level of cooperationwas described as aunequaled in [that] case, and essentially in any other white-collar case, in whichthe[] experienced prosecutors had been engaged.a Sent. Tr. at 32, United States v. Erwin Mayer,09 Cr. 581 (WHP) (S.D.N.Y. Aug. 19, 2014) (ECF No. 849). In imposing a custodial sentence onsuch a cooperating defendant, this Court noted the aneed in these kinds of cases for generaldeterrence.a (Id.)Cohen also asserts that anumerous allegations of unpaid taxes are routinely asserted by theIRS outside of the criminal context,a and cites to news articles about individuals who failed to paytheir taxes. (Def. Mem. at 16-17.) But Cohen did not just fail to pay assessed taxes. He willfullyevaded taxes by hiding entire income streams over a period of years. His acts were fraudulent andevasive, and not the product of mistake, negligence, or a failure of his accountant. Cohenassuggestion that his case should have been handled outside the criminal process ignores the factthat his tax crimes were uncovered in the midst of an investigation of his numerous other crimes.And his complaints about pre-charge process ignore the fact that Cohen was well aware he wasunder investigation for months before he was charged, and his counsel was given severalopportunities to present to the Office as to why he should not be charged and in fact made such a

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presentation. Finally, Cohenas complaints about process and his attempts to blame his accountantmake evident the need for an incarceratory sentence to reflect what Cohen still plainly does notperceive: His actions were not just technically criminal, but serious offenses against theGovernment and the public.The two unlawful campaign contribution cases cited by Cohen are similarly of little valuein crafting an appropriate sentence here. (Def. Mem. at 19.) The defendants in those cases madeexcessive contributions through straw donors, but the amounts of money involved were lesssubstantial, and the effect of the crimes were less severe. Cohenas crimes are particularly seriousbecause they were committed on the eve of a Presidential election, and they were intended to affectthat election. Thus, the gravity of the offense is considerably greater than the offenses committedin United States v. Dinesh DaSouza, No. 14 Cr. 34 (RMB), or United States v. Jia Hou and XingWu Pan, No. 12 Cr. 153 (RJS). Moreover, neither case related to the making of a coordinatedexpenditure a a different offense under the campaign finance laws.Cohen omits the numerous campaign finance cases, including many more analogous to thefacts here, where substantial custodial sentences were imposed for campaign finance offenses.See, e.g., United States v. Stephen Stockman, No. 17 Cr. 116 (S.D. Tex. 2018) (defendant sentencedto 120 monthsa incarceration for making excessive campaign contributions, wire fraud, moneylaundering, and filing false tax returns); United States v. Tyler Harber, No. 14 Cr. 373 (LO) (E.D.Va. 2015) (defendant sentenced to 24 monthsa incarceration following guilty plea for makingcoordinated expenditures and false statements to the FBI); United States v. John Rowland, No. 14Cr. 79 (JBA) (D. Conn. 2015) (defendant sentenced to 30 monthsa incarceration for making illegalcampaign contributions, falsifying records, and causing false statements to be made to the FEC);United States v. Joseph Bigica, No. 2:12 Cr. 318 (FSH) (D.N.J. 2012) (defendant sentenced to 60

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monthsa incarceration following guilty plea to tax violation and conduit scheme involving $98,600in illegal contributions); United States v. Robert Braddock, Jr., No. 3:12 Cr. 58 (LRH) (D. Conn.2013) (defendant sentenced to 38 monthsa incarceration following jury trial involving nearly$28,000 conduit scheme). As these cases amply demonstrate, custodial sentences for seriousviolations of the campaign finance laws are a regular occurrence, and the Court should imposesuch a sentence here for the reasons stated above.Lastly, Cohen places heavy reliance on his provision of information to law enforcement.(Def. Mem. at 1-5). To be sure, this case is in some respects unique, and Cohenas decision to pleadguilty and provide information to law enforcement in matters of national interest is deserving ofcredit. Indeed, it is the principal reason the Office is not seeking a Guidelines sentence here. Butas noted in more detail above, Cohen was well aware of the standard debriefing process in whichcooperators in this District regularly participate, and declined to participate. While he answeredquestions about the charged conduct, he refused to discuss other uncharged criminal conduct, ifany, in which he may have participated.

This precludes him from being given credit for

asubstantial assistancea and obtaining a 5K1.1 letter. The Court should not sentence Cohen as ifhe has one. That is, the credit given to Cohen should not approximate the credit that a witnesswith a cooperation agreement and a 5K1.1 letter would merit.Finally, Cohenas further assertion that he is deserving of leniency because he acould havefought the government and continued to hold the party line, positioning himself for a pardon orclemencya reflects a continuation of his mindset that, at his own option, he is above the lawsreflected in his crimes of conviction. (Def. Mem. at 5). Every defendant in every criminal casehas the right to fight the charges against him. But where, as here, the evidence of their guilt isoverwhelming, defendants often make the choice to plead guilty. After cheating the IRS for years,

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lying to banks and to Congress, and seeking to criminally influence the Presidential election,Cohenas decision to plead guilty a rather than seek a pardon for his manifold crimes a does notmake him a hero.CONCLUSIONFor the reasons set forth above, the Office respectfully requests that this Court impose asubstantial term of imprisonment, one that reflects a modest variance from the applicableGuidelines range. The Office also requests that the Court impose forfeiture in the amount of$500,000, and a fine.Dated:

December 7, 2018New York, New YorkRespectfully submitted,ROBERT KHUZAMIActing United States AttorneyBy:Andrea M. GriswoldRachel MaiminThomas McKayNicolas RoosAssistant United States Attorneys